Grandtech Builders & Developers ... vs Kerala Transport Development ...
2022 Latest Caselaw 3137 Ker

        IN THE HIGH COURT OF KERALA AT ERNAKULAM
                        PRESENT
          THE HONOURABLE MR.JUSTICE N.NAGARESH
FRIDAY, THE 18TH DAY OF MARCH 2022 / 27TH PHALGUNA, 1943
                 WP(C) NO. 5611 OF 2022
PETITIONER:

         GRANDTECH BUILDERS & DEVELOPERS PVT LTD.,
         GULMOHAR, T.C. 3/3603, KESAVADASAPURAM,
         THIRUVANANTHAPURAM-695 003, REPRESENTED BY ITS
         MANAGING DIRECTOR, SALIM M. KABIR, AGED 50,
         S/O. MOHAMMED KABIR.

         BY ADVS.
         R.T.PRADEEP
         SAIJO HASSAN
         K.C.HARISH


RESPONDENTS:

    1    KERALA TRANSPORT DEVELOPMENT FINANCE
         CORPORATION LIMITED - KTDFC
         REPRESENTED BY ITS MANAGING DIRECTOR, LEVEL 8
         (6TH FLOOR), TRANS TOWERS, VAZHUTHACAUD,
         THIRUVANANTHAPURAM-695 014.

    2    THE DISTRICT COLLECTOR
         KUDDAPPANAKUNNU P.O,
         THIRUVANANTHAPURAM-695 043.

    3    DEPUTY COLLECTOR (REVENUE RECOVERY),
         COLLECTORATE, KUDDAPPANAKUNNU
         P.O,THIRUVANANTHAPURAM-695 043.

    4    TAHSILDAR (R.R.),
         TALUK OFFICE, EAST FORT,
         THIRUVANANTHAPURAM-695 023.
 W.P.(C) No.5611/2022
                             :2:


    5      TAHSILDAR,
           TALUK OFFICE, KATTAKKADA,
           THIRUVANANTHAPURAM-695 572

    6      DEPUTY TAHSILDAR (RR),
           TALUK OFFICE, KATTAKKADA,
           THIRUVANANTHAPURAM-695 572

           BY ADV SHRI.T.P.SAJAN, SC, KTDFC
           SRI.APPU PS, GOVERNMENT PLEADER

     THIS WRIT PETITION (CIVIL) HAVING COME UP   FOR
ADMISSION ON 18.03.2022, THE COURT ON THE SAME   DAY
DELIVERED THE FOLLOWING:
 W.P.(C) No.5611/2022
                                         :3:




                             N. NAGARESH, J.

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                         W.P.(C) No.5611 of 2022

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                 Dated this the 18th day of March, 2022

                              JUDGMENT

~~~~~~~~~

The petitioner, a Private Limited Company doing

business in development of land and construction of villas,

high-rise buildings and residential apartments, has

approached this Court seeking to quash Exts.P11 and P14 to

the extent they insist remittance of 10% of principal amount

dehors the remittance by Exts.P7 and P8. The petitioner

also seeks to direct the respondents to allow the petitioner to

participate in the Adalat for One Time Settlement by

reckoning remittance of 10% of principal amount by Exts.P7

and P8 dehors the insistence for further remittance of 10%.

2. The petitioner availed a loan of ₹10 Crores for

Phase-I of their Villa project in the year 2010. For Phase-II, W.P.(C) No.5611/2022

the petitioner availed ₹3.90 Crores. The petitioner could not

make prompt repayment and the 1st respondent-Kerala

Transport Development Finance Corporation Limited initiated

coercive proceedings. The petitioner, therefore, requested

the 1st respondent for One Time Settlement of the

outstanding loans, as per Ext.P3 request dated 11.12.2017.

3. The petitioner states that the 1 st respondent

initiated revenue recovery proceedings against the petitioner.

The petitioner hence filed W.P.(C) No.28620/2018 and this

Court directed the petitioner to pay 10% of the principal

amount outstanding, to participate in the Adalat. The revenue

recovery proceedings were kept in abeyance. The petitioner

remitted ₹51,05,250/- for the loan for Phase-I and

₹40,00,000/- for the loan for Phase-II. As per Ext.P9 OTS

Adalat Scheme, if the loanee remits 10% of the outstanding

principal, the loanee can participate in altogether three

Adalats, contends the petitioner.

4. The petitioner states that in the first Adalat, the 1 st

respondent took a stand that the principal outstanding for the W.P.(C) No.5611/2022

loan of Phase-I is ₹5,09,43,150/-. The said estimated amount

was excessive as the 1st respondent added defaulted EMIs

also to the actual principal amount. Hence, the Presiding

Officers of the Adalat required the 1 st respondent to rework

the figure. Both parties were required to engage Chartered

Accountants to work out the actual principal amount.

5. In the second sitting of the Adalat, the 1 st

respondent stated that the amounts worked out by their

Chartered Accountant is ₹8,64,36,223/- for Phase-I loan and

₹10,39,52,429/- for Phase-II loan. According to the

Chartered Accountant of the petitioner, the amount is

₹3,76,11,754/- for Phase-I loan. The Presiding Officers noted

that the wide difference in the figures is due to the fact that

the unpaid EMI with principal amount and interest is mulcted

with interest and overdue interest for the whole amount of

EMI instead of on the principal component alone. By this

process, the interest levied would be 38%, contended the

petitioner.

W.P.(C) No.5611/2022

6. The petitioner was not called for the third sitting of

the Adalat. Hence, the petitioner gave a letter of participation

for the next Adalat. The petitioner has not received any

communication thereafter. WP(C) No.28620/2018 was

closed directing the petitioner to raise objections to the

quantification. The petitioner thereafter was served with

Ext.P11 requiring the petitioner to make an application for

OTS remitting 10% of the principal amount. The petitioner

sent a reply stating that the 10% remittance is already made

by the petitioner for OTS and the same should be reckoned.

The petitioner also stated that they cannot participate in the

Adalat scheduled on 20.01.2022 and requested to permit to

participate in the Adalat in the month of March, 2022. The

respondents, however, issued Ext.P14 stating that the further

remittance of 10% is required to participate in the next Adalat

and that unless the loan is settled, revenue recovery

proceedings will be resorted to.

7. Aggrieved by Ext.P14, the petitioner has filed this

writ petition. The counsel for the petitioner argued that the W.P.(C) No.5611/2022

petitioner is entitled to participate in the Adalat for One Time

Settlement for the remittance of 10% of the principal amount

by Exts.P7 and P8. That remittance confer right upon the

petitioner to participate in three Adalats. He had participated

only in two Adalats. Hence, the insistence in Exts.P11 and

P14 for further remittance of 10% of the principal amount

without reckoning the remittance by Exts.P7 and P8 is

arbitrary, perverse, unreasonable and violative of Article 14

of the Constitution of India.

8. The learned Standing Counsel representing the 1 st

respondent resisted the writ petition. The 1 st respondent

stated that as per the terms of the OTS Scheme, the

petitioner remitted 10% of the principal amount for

participating in the OTS. It is not correct to state that

remaining loan amount in respect of Phase-I of the project

after rescheduling 42 EMIs would come to ₹2,18,00,000/-.

As per the computations of KTDFC, the balance principal

amount remaining in the loan will come to ₹5,09,43,150/-.

The outstanding amount worked out by the Chartered W.P.(C) No.5611/2022

Accountant appointed by the KTDFC was ₹8,64,35,379/-.

9. The calculation made by the Chartered

Accountant of the petitioner is at a figure of ₹3,76,11,754/-

for Phase-I loan. The amount calculated by that Chartered

Accountant was by taking the figure of principal amount and

without taking into account the interest portion. The

outstanding balance in the loan account was calculated as

per the terms of the loan agreement. As per the OTS

Guidelines 2018 of the KTDFC, if a loanee is ready to attend

OTS, he will be eligible for attending one sitting. In the case

of the petitioner, he had been given two chances to attend

the OTS Adalat on the strength of Exts.P7 and P8

remittance. There is no provision in the OTS Adalat Scheme

to participate an applicant in the OTS Adalat for the third time

on the strength of the remittance made. In view of the above

facts, the petitioner is not eligible to participate in the OTS on

the strength of the remittance of 10% of the principal sum as

per Exts.P7 and P8 on the basis of which the petitioner had

been allowed to participate in the Adalat on two occasions. W.P.(C) No.5611/2022

10. I have heard the learned counsel for the petitioner,

the learned Standing Counsel for the 1 st respondent and the

learned Government Pleader representing respondents 2

to 6.

11. The issue arising for consideration in this writ

petition is whether the petitioner is eligible to attend OTS

Adalat and if so, whether the petitioner is bound to remit an

additional 10% amount for attending the Adalat.

12. The petitioner had loans of ₹10 Crores for their

Phase-I and ₹3.90 Crores for their Phase-II of the Villa

project. The petitioner has repaid ₹11,32,48,174/- till

12.08.2015. The 1st respondent's NOC was required to sell

the Villas. According to the petitioner, the 1 st respondent

issued NOC only for ₹5,07,97,074.98 so far as Phase-I is

concerned. The remittances fell into arrears and when

revenue recovery proceedings were initiated, the matter was

brought before this Court by the petitioner filing W.P.(C)

No.32943/2014. By Ext.P1 judgment, this Court gave specific

direction to put up for sale the unsold Villas out of the W.P.(C) No.5611/2022

completed 111 Villas in the Phase-I project and to liquidate

the liability out of the sale proceeds. An officer of the 1 st

respondent-Corporation was assigned the task of putting up

for sale the unsold Villas.

13. Though the 1st respondent adopted e-tender

process for sale of Villas through an online site, there were

no buyers. It was in such circumstances that the petitioner

approached the 1st respondent for One Time Settlement. The

petitioner remitted ₹51,05,250/- for the loan for Phase-I and

₹40 lakhs for the loan for Phase-II, which is the 10%

remittance required for participating in the OTS Adalat. The

remittances are evidenced by Exts.P7 and P8. In the Adalat,

dispute arose as to the principal amount outstanding to be

computed. According to the petitioner, the principal amount

outstanding for Phase-I would be ₹5,09,43,150/-. According

to the 1st respondent, the principal amount was much higher.

The Presiding Officers of Adalat directed the parties to figure

out the amount outstanding, engaging their Chartered

Accountants.

W.P.(C) No.5611/2022

14. In the second sitting of Adalat, the 1 st respondent

claimed that ₹8,64,36,223/- is the principal outstanding for

loan for Phase-I. According to the Chartered Accountant

engaged by the petitioner, the principal outstanding would be

₹3,76,11,754/- for the loan for Phase-I. According to the

petitioner, this wide gap in the calculations of principal

amount is due to the fact that the 1 st respondent mulcted the

unpaid EMI amounts with the principal amount. According to

the 1st respondent, they have computed the principal amount

strictly in accordance with the terms of the agreement. It is

the specific case of the petitioner that the Presiding Officers

of the Adalat reached a consensus with all the parties to

have a rework in the amount outstanding and to consider the

matter in the next sitting.

15. The petitioner could not attend the Adalat held in

the month of January, 2022 and requested the respondents

to permit the petitioner to participate in the Adalat scheduled

in the month of March, 2022. The 1st respondent thereupon

issued Ext.P14 communication stating that the petitioner can W.P.(C) No.5611/2022

participate in the Adalat now only on payment of 10% of the

principal amount. The petitioner states that they are eligible

to participate in the next Adalat also on the basis of the

payment already made as per Exts.P7 and P8.

16. Ext.P9 OTS Adalat Scheme provides that "if the

loanee remits the 10% of the outstanding principal for

participation in OTS Adalat, but fails to attend the next two

Adalats or fails to settle the loan in the next two Adalats, the

amount so remitted will be adjusted to the loan account in

accordance with the original terms and conditions of the

loan". The said Clause will indicate that it is only when the

petitioner fails to attend the next two Adalats or fails to settle

the loan in the next two Adalats, that the 10% amount can be

adjusted by the 1st respondent against the loan outstanding.

17. In the case of the petitioner, both in the first and

second sitting of Adalat, no settlement could be arrived at for

the reason that the petitioner and the 1 st respondent could

not arrive at an acceptable figure as regards the outstanding

principal amount. Even the presiding officers of the Adalat W.P.(C) No.5611/2022

required the parties to consult their respective Chartered

Accountants. The Chartered Accountants of the petitioner

and of the 1st respondent gave different opinions. According

to the 1st respondent, while calculating the principal amount,

they have adhered to the provisions of the agreement. The

issue is whether defaulted EMI can be added to the principal

outstanding for the purpose of calculation of principal amount

for the purpose of OTS. This is a fundamental difference of

opinion emanating from accounting standards and

accounting practices. The learned Standing Counsel for the

1st respondent would urge that as long as the petitioner

cannot agree with the amount arrived at by the 1 st

respondent as regards the principal outstanding, there will be

no use in petitioner participating in the OTS Adalat. Unless

the petitioner agrees to the principal outstanding amount

arrived at by the 1st respondent, the OTS attempts will not be

fructified.

18. I am unable to accept the argument of the 1 st

respondent. In any Adalat, difference of opinion between the W.P.(C) No.5611/2022

parties would invariably arise. It is to sort out the said

difference of opinion and to arrive at an amicable settlement

that the OTS Schemes are framed. It will be a travesty of

justice if one of the party is forced to agree to a disputed

proposition, as a condition precedent for participating in the

Adalat, when the Adalat themselves are intended to iron out

such difference of opinion and difference in perception. In

the facts and circumstances of the case, I am of the firm view

that the petitioner shall be permitted to sort out the disputes

with the 1st respondent in the next/ensuing OTS Adalat of the

1st respondent. As the petitioner has made 10% remittance

as evidenced by Exts.P7 and P8, the petitioner should be

permitted to participate in the next/ensuing Adalat without

insisting for further remittance.

The writ petition is therefore disposed of directing

the 1st respondent to permit the petitioner to participate in the

next ensuing OTS Adalat without insisting on further 10%

remittance. Till the petitioner is given the afore opportunity, W.P.(C) No.5611/2022

no coercive steps shall be initiated or proceeded with against

the petitioner.

Sd/-

N. NAGARESH, JUDGE aks/18.03.2022 W.P.(C) No.5611/2022

APPENDIX OF WP(C) 5611/2022

PETITIONER'S EXHIBITS

Exhibit P1 TRUE COPY OF THE JUDGMENT DATED 17.3.2017 IN W.P.C NO. 12644/2013, W.P.C NO. 13098/2013 AND W.P.C NO.

32943/2014.

Exhibit P2 TRUE COPY OF THE E-TENDER DATED 22.09.2017 PUBLISHED FOR SALE OF VILLAS BY THE CORPORATION.

Exhibit P3 TRUE COPY OF THE REQUEST FOR ONE TIME SETTLEMENT DATED 11.12.2017 BEFORE THE 1ST RESPONDENT.

Exhibit P4 TRUE COPY OF COMMUNICATION DATED 20.08.2018 BY 1ST RESPONDENT TO PETITIONER CALLING UPON FOR ONE TIME SETTLEMENT.

Exhibit P5 TRUE COPY OF COMMUNICATION DATED 21.7.2018 FROM 3RD RESPONDENT TO 4TH RESPONDENT.

Exhibit P6 TRUE COPY OF ORDER DATED 30.08. 2018 IN W.P.C NO. 28620/2018 Exhibit P7 TRUE COPY OF RECEIPT DATED 3.10.2018 OF REMITTANCE OF RS. 51,05,250/-.

Exhibit P8 TRUE COPY OF RECEIPT DATED 15.10.2018 OF REMITTANCE OF RS. 40,00, 000/-.

Exhibit P9 TRUE COPY OF GUIDELINES FOR ONE TIME SETTLEMENT SCHEME OF THE COPORATION.

Exhibit P10 TRUE COPY OF JUDGMENT DATED 3.3.2020 IN W.P.C NO. 28620/2018 Exhibit P11 TRUE COPY OF COMMUNICATION DATED 13.1.2022 OF THE CORPORATION INVITING THE COMPANY FOR ONE TIME SETTLEMENT.

Exhibit P12 TRUE COPY OF APPLICATION DATED 17.1.2022 BY PETITIONER FOR ONE TIME SETTLEMENT BY RECKONING THE EARLIER REMITTANCE OF 10 % OF THE PRINCIPAL AMOUNT.

 W.P.(C) No.5611/2022



Exhibit P13            TRUE COPY OF REPRESENTATION DATED
                       20.01.2022    BY     PETITIONER    FOR
                       CONSIDERATION FOR ONE TIME SETTLEMENT
                       BY RECKONING THE EARLIER REMITTANCE OF
                       10 % OF THE PRINCIPAL AMOUNT.
Exhibit P14            TRUE   COPY  OF   COMMUNICATION  DATED
                       5.2.2022 FROM THE CORPORATION.
Exhibit P15            JUDGMENT DATED 10.03.2020 IN W.P.C NO.
                       2615/2020